Page 541 - Business Principles and Management

Unit 6

OPERATING A SERVICE BUSINESS
By understanding the unique characteristics of services,
managers in charge of planning services can do a better job
of meeting customer needs. Consider the planning that must
be done by the managers of Millennium, the new store de-
scribed at the beginning of the chapter. They must make
sure the business offers the best level of customer service
possible to the thousands of people who shop there.
Because a service is intangible, service providers must
find ways to describe their service to prospective customers.
They may have to demonstrate how they will provide the
PHOTO: © GETTY IMAGES/PHOTODISC. vide a product to customers as part of the service. Insurance
service and the benefits the customers will receive. To help
overcome this problem, service businesses sometimes pro-

companies provide policy documents and leather cases to
hold the documents, tour services provide travel bags, and
hotels provide small gifts in their rooms to remind their
guests of the service and the service provider.
The service must be provided in an acceptable way to
the customer. A client visiting a barbershop may want the
services of a specific barber. A person completing a bank
How can employees of service transaction may want to talk with a teller rather than use
businesses do a better job of an ATM. Airline travelers may prefer not to stand in long lines to check their
meeting customers’ needs? luggage and get a boarding pass for their flight.
The people providing the service must be well trained. They must be able to
work with customers, identify needs, and provide the appropriate service. They
must recognize that customer satisfaction is directly related to how well they
perform. In turn, customers will expect the same quality of service each time
they purchase it.
The supply of a service must be matched to the demand. If a bus company
expects a large number of customers to ride its buses on the Saturday of a home
football game, it may have to schedule more buses. If a snowstorm is anticipated,
companies that clear parking lots and driveways may need to find additional
equipment and operators. During a particularly cool and rainy summer, the opera-
tor of a swimming pool will probably need to schedule fewer lifeguards and pool
attendants.

CHECKPOINT

Describe the four basic characteristics of a service business.

Ensuring Service Quality

Just as manufacturers are constantly improving their products and processes to
better satisfy customers, service businesses also look for better ways to provide
services. Some of those ways include hiring and training employees more care-
fully, thoroughly planning how to maintain service quality standards, and using
technology to improve the availability and delivery of services. The Internet is

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